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The Utility of a Three-Tiered Navy

We can have 350 ships, 50 amphibs, 25 percent more overseas presence, 20 percent more wartime capacity, and use 10 percent fewer people, all with no new money.

President Barack Obama’s strategy of January 2012 asked the Department of Defense to think differently, and to find ways to do more with less. The serial budget crises, the looming peace dividend, and the rising costs of shipbuilding all require us to reconsider every facet of how we do business. Secretary of the Navy Ray Mabus said recently to the assembled flag wardroom of the Navy: “We have to innovate, think, act, and deliver.” Indeed, we are collectively rethinking much about our surface Navy—the way we acquire and build ships, the way we make them ready, and the way we employ and sustain them. The following should add grist to that innovation mill.

Our Navy has two jobs: First, we play the “away game,” providing overseas presence and an immediate ability to show the flag and respond to crises. This is an enduring peacetime requirement. Second, we must fight and win wars. This is an episodic requirement. Put simplistically, wars can be categorized in two sizes: small crises that can be handled with nearby prepositioned naval forces (think Libya), and real wars against significant competitors, events that will allow time for a mobilization of naval forces to the area (think World War II, the Korean War, and Operations Desert Storm and Enduring Freedom).

How Are We Doing?

Chief of Naval Operations Admiral Jonathan Greenert has six primary words of guidance: “Warfighting First. Operate Forward. Be Ready.” His favorite graphic is a chart that shows the world, and where our ships are. Assuming a current inventory of 284 ships, 58 are forward-deployed, and 226 are rotational.

How does our current construct support the CNO’s priorities? Let’s look at operating forward. Those 58 forward-deployed ships are available for tasking approximately 90 percent of the time. Each year, they collectively provide 52 ship-years of forward presence. On the other hand, the 226 rotational ships are on-station overseas approximately 22 percent of the time. (Assume 6 months on-station overseas in a 28-month readiness cycle.) They collectively provide only 55 ship-years of forward presence. In other words, those 226 ships play about as much away game as the 58 forward-deployed ships.

How about “being ready” for “warfighting first?” Depending on where the war is, half the forward-deployed ships are in the wrong part of the world to fight immediately. Of the continental U.S (CONUS)–based rotational ships, a third are in maintenance, and half of the remainder are more than 30 days from the fight. Face it—any major wartime fight will not occur immediately with the forces on hand. It will occur later, after we’ve had at least two or three months to assemble our forces at the right place. World War II, Korea, the Falklands, and Desert Storm all were fought once available forces were assembled and pushed forward to the fight.

Consequently, we have an existential problem. On one hand, to do forward presence, and to do warfighting, we need ships there. As Admiral Greenert said recently, also to his assembled admirals: “Being there matters. We gotta be there where it matters and we have to be ready when it matters.” But on the other hand, we can’t afford enough ships to be in all places at all times, particularly with the density required to fight a war.

Can We Do Better?

We can, indeed, do better. We can have more peacetime presence, and more wartime punch, with no new money. It will take five distinct steps, each of which is both difficult and doable.

Establish a Three-Tier Navy

Tier I is forward-based, non-rotational. It includes those ships in Japan as Forward Deployed Naval Forces and ships based in Bahrain. Those ships go over there, and stay there. Tier II is CONUS-rotational. These are the normal ships in Fleet-concentration areas in the United States, going through a readiness cycle that includes overseas deployments. And Tier III is CONUS-standby. This is a ship in standby, or reduced operating status. It’s not new, actually. It’s been used by every navy in the world for hundreds of years (including the British today). We use it in our Navy for Military Sealift Command (MSC) ships, and for our Ready Reserve Force (RRF), the strategic-sealift ships maintained by the Maritime Administration. It’s just new to the surface-warfare line community.

Assume a prototypical surface combatant (cruisers, destroyers, or amphibs), and assume a crew of 250. To be Tier III, we’d replace that active-duty crew with a reserve crew. We’d tie the ship up to a pier, lay-up her major equipment, and keep her there for five years. The reserve crew of 250, using their normal drills and annual training period, would keep a minimum of 20 sailors on the ship at all times; they’d perform maintenance, provide security, and keep the ship up with a reduced Operations & Maintenance (O&M) budget.

After five years, the ship would have a modernization availability and be restored to Tier I or Tier II status. If, during the five-year standby period, the ship was needed to fight a war, the reserve crew would be mobilized and supplemented by perhaps 20 key players in leadership positions. These would be drawn from shore sources, because for a major war effort, we will empty our shoreside staffs to fill afloat requirements. (It’s the same way we currently man our hospital ships—during standby status, there is only a skeleton staff on board. When the ship has to surge to a crisis, we fill the on-board hospital staff by taking from shoreside medical facilities.)

Let’s compare costs. Assume, again, a prototypical surface combatant in Tier II status (CONUS-rotational). A crew of 250 costs about $25 million a year. O&M budgets vary widely, but $30 million per year is a good working average for illustration purposes (ship operations [1B1B] and ship depot maintenance [1B4B] budgets). Total cost: $55 million per year. A Tier I ship (forward non-rotational) has the same manning, but given her forward presence, her O&M requirements would be about 33 percent higher. So her total cost is about $65 million per year. A Tier III (CONUS-standby) ship needs only 20 percent as much manpower money for the reserve crew (when in standby), and only 25 percent as much O&M due to her reduced maintenance load. Her total peacetime cost is $12.5 million per year. Figure 1 shows this comparison.

Push Ships to Tier I

The CNO already plans to increase our forward-deployed naval forces from 58 today to 82 in 2017. We’re moving ships to Bahrain, Singapore, and Rota. We should push even more ships forward, and accelerate the effort by new thinking on what it takes to sustain a ship forward. We classically require an American base. Think Rota, or Yokosuka or Bahrain. That limits our opportunities to those countries willing to allocate their sovereign soil to an American base. Why can’t we station ships forward through long-term pier-leasing arrangements? Instead of an American base, why can’t we have an American building or two as a tenant on a host-nation base? Instead of building a small American city (fences, commissary, DOD school, housing, etc), why not let our families live on the economy? Why not avoid forward-deployed families by mastering crew swaps? By reducing our post–World War II expectations of the requirements associated with forward basing, and by convincing our parties we were there for merely an extended port visit, there’s no reason we couldn’t put four ships in each of Athens, Portsmouth (UK), Toulon, Brazil, South Africa, Sydney, Guam, Diego Garcia, Hanoi, and Subic Bay, to name a few.

In addition, some ships don’t need bases. We could send two joint high-speed vessels (JHSVs) to Africa (one for each coast), with MSC crews who rotate and thus don’t need families ashore overseas. Let those ships meander up and down each coast for three years at a time, in the same way that American ships once deployed to the Mediterranean for three years at a time, without a U.S. base. Let’s do the same in Micronesia and the southwest Pacific. Combatant commanders could periodically send detachments (from any service or government agency) to ride on the JHSV to perform various functions. With some innovation and ingenuity, a JHSV could keep a 20-person civilian volunteer medical team on board in perpetuity, acting as a permanent manifestation of American soft power. Tens of thousands of American medical professionals would jump at the chance to volunteer for a 90-day sabbatical serving the needy from the platform of a U.S. ship, if only the Navy gave them that chance.

To truly push our Navy forward, we must get away from the “gotta have a big American base” mindset. Secretary Mabus has asked for “low cost, small footprint, innovative ways” of playing the away game. It starts with our brains, and what we require in forward basing. (Perhaps we should eliminate the word “basing” completely and instead talk about forward “floating.”)

Increase the Yield of Tier II

We can’t afford multibillion-dollar warships that have a 22 percent yield in peacetime presence. Admiral William Gortney is leading the staff at Fleet Forces Command in the hard work toward a revision of the carrier-deployment plan (and eventually the deployment cycle for all surface ships) that would increase this yield. He told the flag wardroom: “We want to maximize forward presence with available capacity.” If we could get ships forward for 11 out of 36 months (perhaps two six-month deployments in a three-year cycle, less transit time), we’d increase the yield from 22 to 30 percent. That’s a 36 percent improvement over the status quo.

Employ Tier III

At appropriate times, we should put serviceable ships into standby, or Tier III. This is not mothballing—not the James River Fleet or the Philadelphia Navy Yard. It’s a commissioned warship, tied to a Navy pier; it just doesn’t get under way. We start by laying up certain portions of the ship’s equipment, using the O&M dollars already budgeted. We’d remove the active-component (AC) sailors and embark reserve-component (RC) sailors, who would wear the ship’s crest and own the ship. They would work part-time within existing RC manpower budgets—each spending a minimum of 30 days a year on the ship. Collectively, those 250 sailors, led by an RC commanding officer, would keep the ship manned, safe, and maintained. There would be 20 sailors on board every day of the year, performing maintenance to keep the ship in serviceable condition.

At the end of an extended period of standby (five years or so), the process would be reversed. The ship would de-crew the RC and crew up with AC sailors, and the laid-up systems would be restored. Ideally, the ship would do this through a modernization availability that would restore her to Tier I or Tier II duty.

Make Ships Last 40–50 Years

Ships get too old to serve for two reasons. Either the hull and mechanical (HM&E) systems wear out (sometimes), or the combat systems (C5I) become obsolete (more often the culprit). Surface-force leadership, Vice Admiral Thomas Copeman, Commander Navy Surface Forces, and Rear Admiral Thomas Rowden, Director Surface Warfare Division (OPNAV N96), are already working ship-design concepts that decouple the HM&E from the C5I suite, so that a given hull can have new, modern C5I suites plugged in two or more times during its life.

With the three-tier concept, ships will spend about 25 percent of their time in standby status—perhaps a decade of a 40-year life. We already have the ability to make ships last that long, and as the new concepts of trucks and payloads (or decoupling HM&E from C5I) roll out, we can move to 50-year life on our hulls. Do the math: if we produce ten ships a year and they each last 30 years, we have a 300-ship Navy. If they each last 50 years, we have a 500-ship Navy for the same acquisition cost. We can use the three-tier method to reduce costs, or increase effectiveness, or both.

Figure 2 shows the results if we maintain the ship count and try to optimize effectiveness and costs. Assume that of our 226 Tier II CONUS-rotational ships, we moved 30 forward to Tier I, and moved 40 ships to standby status, Tier III. Overseas presence goes up by 9 percent. Direct costs go down by 9 percent. AC sailor headcount goes down by 10,000 people. Note that the many indirect costs associated with those 10,000 people (training, housing, medical, shore facilities, retirement, etc) are not included in these calculations. Thus, the actual savings will be greater.

Figure 3 shows how we could get more effectiveness with the same budget as today. Assume we moved more ships out of Tier II until we had 110 ships forward in Tier I, and 96 ships in standby Tier III. The results: 24 percent more forward presence than we have today, with 350 ships, and still a 10 percent reduction in AC sailors. This result also assumes that we find a way to get our Tier II ships up to an overseas presence yield of 30 percent.

Finally, if the only goal was to save money, we could maintain the current ship count and the current overseas presence for 20 percent less direct cost. By shifting a total of 110 ships forward to Tier I, and moving 85 ships back into standby (Tier III), we could achieve the same overseas presence with the same ship count, with 20 percent less money and 21,000 fewer AC sailors.

Bottom line: The three-tiered concept can either give us 20 percent more bang for the same buck, or deliver the same bang for 20 percent less buck. Our choice.

Three Caveats

First, all figures here are approximate. I certainly recognize the artificiality of portraying our 284-ship Navy as comprised entirely of non-nuclear surface ships with 250-person crews. The principles remain the same, and the conclusions, if laid out in detail across all different classes, will be the same: We achieve the best bang for our away-game buck by putting ships overseas, and the best bang for our warfighting-surge buck by allocating a portion of the Fleet to standby status, operating at 20 percent cost.

Second, there are obviously opportunities for pushback. Naysayers may opine, “We can’t successfully put ships in standby; C5I systems can’t be laid-up and restored; reservists can’t be counted on to man ships; the O&M costs to lay ships up are too great; standby ships can’t be restored in time to get to the fight; we’d be short of people to man those ships in a wartime mobilization; we can’t make surface-ship crew swaps effective; we need overseas bases to forward deploy; we’ll never find enough overseas locations; it would wreck our existing personnel rotation.” All have some validity, but each objection can be overcome if we choose; their refutation would take more words than allowed here. Rather than succumb to our natural disinclination to change, or our dismay at the concept of tying our ships to piers for years at a time, we should study the concept, and define the conditions under which it would work. Because, if we choose to, we could make it work. We’ve done much harder things.

Finally, some will say, “there’s nothing new here.” That is correct. None of this plan has not been done before (either in the United States or with other navies.) The CNO is already pushing to move ships forward. U.S. Fleet Forces is already increasing the yield of CONUS-based rotational ships. We’re already working to extend the duration of a ship’s life. Our Navy, and other navies, put ships in standby. We successfully surged with reservists to fight World War II. (Our initial shortage then wasn’t people; it was ships!) The only thing new is the proposed trade-off in this coming environment: putting ships into standby as an alternative to budget cuts driving us to a much smaller Navy.

The Hard Choices

Throughout our Navy’s history, we have been faced with choices that were difficult to make at the time, but that today seem self-evident. They were opposed by traditionalists; they were fraught with execution risk. Steam propulsion. Ironclads. Oil as fuel. Aircraft carriers. Nuclear power. Today, we choose which path to take. We can choose the conventional path, which will inexorably make us smaller and less effective as a Navy. (Remember Great Britain, a nation with a maritime tradition that far exceeds ours; its taxpayers have determined that they no longer wish to bear the cost of a navy. As a result, the British fleet is a shell of its former self.) Or, we can use the current crisis as an impetus to think differently.

Southwest Airlines is the most profitable and successful company in the history of aviation. But many years ago, it was a startup in danger of demise. Flying a mere four planes between cities in Texas, Southwest was out of money. It had to sell a plane to pay the bills. The standard solution of that era, and the “normal” way of thinking for every airline in history, was that a reduction from four to three planes meant that Southwest would simply cut its flight schedule by 25 percent. Fewer planes equal fewer flights. It was the standard recipe, but a recipe for eventual oblivion.

Instead, Southwest management asked: Why can’t we fly just as many flights, but with only three planes? That question, and the subsequent determination to make it happen, eventually created the airline’s rapid-turn-at-the-gate operation. It meant that Southwest planes spend less time on the ground than any other airline; conversely, its planes spend more time in the air (carrying paying passengers) than any other airline. In other words, the financial crisis forced Southwest to find a way to dramatically improve the “yield” of its hardware. The rest, as they say, is history. Southwest’s competitors from that era (who did things the “normal” way) have since gone out of business.

Secretary Mabus told the flag wardroom: “You never get anything big done by being timid.” We can decide to weather the current fiscal crisis by hunkering down, operating fewer ships, and accepting that a smaller Navy will still be the best on the planet. That’s certainly a viable plan. On the other hand, we can use these difficult times to make difficult decisions and implement difficult plans to better achieve our Navy’s dual missions of forward presence and warfighting surge capability. This latter course deserves our careful study and consideration.

Rear Admiral Wray is currently the President of the Board of Inspection and Survey (INSURV) in Norfolk, Virginia. He is a 1979 U.S. Naval Academy graduate, a nuclear-trained surface-warfare officer, and a reservist who spent 20 years running businesses before being promoted to flag and placed back on active duty.